What’s Driving Producers’ Interest in the Eagle Ford Shale
Increased activity in the Eagle Ford
Now that we’ve looked at key Eagle Ford companies’ production metrics and performance, let’s look at how the industry views the region. Two companies that identified the Eagle Ford Shale as a “key growth driver” in 2016 are Chesapeake Energy (CHK) and Cabot Oil & Gas (COG). Both natural gas–weighted companies have forecast significant oil growth in 2017, most of it coming from the Eagle Ford.
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Chesapeake’s 2017 capex is skewed towards its oil-generating assets, such as the Eagle Ford. Oil (USO) (DBO) assets are expected to form 60% of its total capex. Between 4Q16 and 4Q17, Chesapeake expects its exit-to-exit total production to rise ~7%, adjusted for asset sales. Its exit-to-exit oil production is expected to be ~10% higher.
Cabot Oil & Gas
Like Chesapeake Energy (CHK), Cabot expects to see significant oil (UCO) growth in 2017, and it will be driven by the Eagle Ford. Approximately 33% of the company’s D&C (drilling and completion) capital will be allocated to the Eagle Ford Shale. Cabot Oil & Gas’s March 2017 presentation noted that improved Eagle Ford economics resulted in a budget increase to fund additional D&C in the region. The jump in oil growth expectations (50%) is significant compared with the marginal increase in its capex forecast (13%). To learn more, read What Cabot Oil & Gas Envisions for Its Eagle Ford Operations.